10 companies that made big benefits changes in 2016
Moving to a private exchange. Implementing student loan repayment programs. Enhancing paid parental leave benefits. These are among the changes some big-name firms — including Starbucks, PwC, Staples and Bank of America — made this year to their employee benefit packages. Here is a look at notable changes made by 10 companies in 2016.
Baristas now have as much choice in their healthcare as customers do with their beverages.
In July, Starbucks announced it was expanding healthcare coverage for all of its eligible full- and part-time employees by moving to a private exchange.
That move put more choices in front of employees: Instead of three levels of coverage through one insurance carrier, employees now have five “metallic” levels of medical plan offered by the Aon Active Health Exchange.
The java giant said it will continue to fund approximately 70% of the premium costs and cover 100% of preventive care services. The company also suggests that eligible partners in the U.S. could save up to $800 annually by moving to a health insurance plan that better meets their individual needs. Potential savings are even more for partners who select family coverage, with the opportunity to save $2,600 annually, Starbucks said.
In early November, Staples announced the launch of its student loan repayment plan, joining a growing number of companies offering the workplace benefit to employees burdened with student debt.
The office-supply retailer said the first phase of its program targets specific new-hire sales associates and “high potential and top performers” — employees throughout the company who have been nominated by leadership. Eligible employees — active, full-time U.S. associates with at least one outstanding loan obligation and who have obtained or are in the process of receiving a degree from an accredited institution — will have their loan principal paid at $100 per month for 36 months.
A Staples spokesperson said the program will benefit approximately 2,000 of its 74,000 employees. Down the line, the benefit will be offered to additional groups of employees, Staples said.
“Offering a student loan repayment benefit will help with recruiting, retention and engaging employees as well as drive loyalty,” says Regis Mulot, Staples’ executive vice president, global human resources. "Additionally, it will increase attraction and expand penetration with a younger-aged workforce.”
Staples wasn’t the only company to begin a student loan repayment program this year. Among others was PwC, which in July began its own program to help nearly half of its 46,000 employees pay down their student loans.
The professional-services firm contributes $100 per month ($1,200 per year) for up to six years (a maximum of $7,200) to help non-management employees pay down their student loans. PwC pays the money directly to its employees’ student loan servicer, the middlemen who collect payments.
Part of the motivation for offering the benefit was the demographic of the company’s workers — PwC is a millennial organization; the average age of its employees is about 28.
“Millennials tell us they’re living longer at home. They are delaying major life decisions like marriage and having children. They are putting off major purchases like cars. They’re not saving for retirement,” says PwC’s U.S. and global talent leader, Mike Fenlon.
Boxed, an online wholesale shopping club, already was known for unconventional benefits for its employees. Last year, Boxed CEO Chieh Huang made quite the splash in the benefits industry when he announced that he would start paying for the college tuition of the children of his employees. But this year, he went a step further: Huang said he was also going to pay for the wedding expenses of all his unmarried employees.
“Our goal is to strengthen the overall employer-employee bond,” Huang told EBN earlier this year. “I think paying for college tuition and wedding expenses helps us do that.”
Huang is now writing college tuition checks for four students. He has committed the value of a chunk of his Boxed stock to fund the benefit as more students become eligible for the program over the next five or six years. By that time, he hopes the company will be sold or go public and that half of his stock will easily pay for all those college educations.
Amazon’s big offering this year was a benefit that’s consistently highly rated by employees: flexible scheduling.
In a move revolutionizing work-life balance, the world’s largest online retailer in August said it was piloting a program offering a 30-hour work week to a small group of its thousands of employees. The participants will receive full benefits but 75% of their full-time pay. Their core hours will be 10 a.m. to 2 p.m. Monday through Thursday, with additional flex hours, and they can transition to full-time if they choose, Amazon says.
“We want to create a work environment that is tailored to a reduced schedule and still fosters success and career growth,” the company said in a statement. “This initiative was created with Amazon’s diverse workforce in mind, and the realization that the traditional full-time schedule may not be a ‘one size fits all’ model.”
This year Chipotle Mexican Grill decided to serve up a new employee benefit to its workers: enhanced educational initiatives.
The eatery partnered with Colorado-based Guild Education to help its employees pursue undergraduate or graduate degrees, take college courses or attend graduate school at little to no cost, earn a GED, or study English as a second language.
Employees have access to up to $5,250 annually in previously available tuition reimbursement from Chipotle, and an additional $5,815 in federal grants for qualified applicants in undergraduate programs. Through these programs and the discounted tuition offered to Chipotle employees by Guild Education, many participants can complete their degree for as little as $250 per year.
The partnership built on Chipotle’s existing tuition benefit. Last year, the company expanded the benefit to part-time employees after previously offering the perk only to salaried workers.
Ernst and Young already had a competitive paid parental leave policy. But in July, the professional-services company made it even better when they expanded the program to 16 weeks of fully-paid parental leave available to all men and women welcoming a child through birth, adoption, surrogacy or legal guardianship. Previously, EY offered 12 paid weeks off for new birth mothers and six weeks for dads and adoptive parents.
The decision to enhance the company’s paid parental leave program was research-based. Earlier this year, EY and the Peterson Institute for International Economics released a global survey that explored gender equity issues within executive-level positions.
The study found the countries with the highest percentages of women in leadership, including in the boardroom and at the executive level, offered fathers 11 times more paternity-leave days than those countries at the bottom.
On average, 1,200 of EY’s 45,000 U.S. employees — split evenly between women and men — took parental leave in the last several years, with new mothers generally taking the full 12 weeks and fathers averaging 2.6 weeks. However, with the same paid leave period available to all employees going forward, the company is actively working to eliminate any stigma associated with dads going on longer leaves.
The new benefits also include financial assistance up to $25,000 per family for adoption and advanced reproductive technology procedures, including surrogacy and medically necessary egg and sperm freezing.
This year brought a sweeping overhaul to Microsoft’s employee benefits package. Among the changes? Doubling the amount of paid time off new parents will receive, adding companywide holidays and reworking its 401(k) matching program.
Notably, in January, Microsoft increased the company’s 401(k) match program, matching 50% of employee deferrals up to $9,000 per year. That’s a significant increase from the company’s previous employer match, which was 50% of the first 6% employees deferred, to a maximum of 3% of pay.
“We review our benefits portfolio every year, looking at it holistically in terms of the investment we’re making from a cost perspective, but also how we’re benchmarking among our peers,” says Sonja Kellen, director of global retirement benefits for Microsoft. “We wanted to balance it out a little bit more. Our health plan is incredibly generous; we find [it] to be one of the best in the industry. We wanted to make sure that we had equally as much investment in our financial benefits.”
In the spring, Bank of America announced it would increase the amount of paid time off it offers new parents to 16 weeks from 12 weeks. The new policy, which began April 4, entitles men and women to the same amount of leave; adopted parents are also covered.
“We improved our program for two reasons,” Jim Huffman, the bank’s U.S. health and wellness benefits executive, told EBN in the fall. “We got feedback from our employees. It’s also something we believe in as a company — our CEO, our management team and our head of HR.”
Wal-Mart Stores added insurance coverage for transgender workers this year, joining more than 500 companies taking a bigger role in advancing the rights of LGBT employees in a competitive market for labor.
Despite the fact that as few as 1 in 20,000 employees are expected to use the benefit, the move has been praised for its inclusiveness.
“At Wal-Mart, respect for the individual is one of the core beliefs that are the foundation of our company,” spokesman Kevin Gardner said in a statement. “We are committed to fostering an inclusive work environment for our more than 2 million associates around the globe.”